In this week’s roundup, senior RSG contributor John Ince covers the latest delivery news, how Uber wasted billions on self-driving cars, and could remote-controlled cars be in our future? That news and more below.
Uber Can Continue Operating in London, Judge Rules [NYTimes]
Sum and Substance: After a battle with transportation regulators, the ride-hailing firm was granted an 18-month license.
Uber scored an important victory on Monday when a judge restored the company’s transportation license in London, one of its most important global markets, where regulators had threatened to ban its cars from the road over safety concerns.
A deputy chief magistrate, Tan Ikram, said Uber had met a “fit and proper” standard to receive a license for 18 months. Mr. Ikram said Uber had taken the necessary steps to address regulators’ concerns, including new safety measures to keep unauthorized and uninsured drivers from using its platform to carry passengers….
… In August, the company reported that revenue from its ride-hailing business had fallen 67 percent from a year earlier. The company posted a net loss of $1.8 billion. Its stock price still trades below what was sold at its initial public offering, a sign of investors’ lack of confidence in the company. …
My Take: This was expected, but it’s still significant. London is one of Uber’s main markets and getting the clearance is something Uber had been hoping for.
Postmates cuts losses in Q2 as it heads towards tie-up with Uber [Techcrunch]
Sum and Substance: Popular food delivery service Postmates is in the process of merging with Uber in a blockbuster $2.65 billion deal that would see it join forces with its food delivery competitor, Uber Eats. The deal remains under antitrust scrutiny and has not yet been approved for closing. The deal is expected to close in the first half of 2021….
Postmates posted a loss of just $32.2 million in Q2, compared to a loss of $73 million in Q1, nearly cutting its cash-burning in half. That compares to Uber Eats’ results, which showed a loss of $286 million in the first quarter of 2020 and a loss of $232 million in the second quarter — an improvement of roughly 20%, according to Uber’s most recent financial reports.
My Take: The losses aren’t as bad as were feared, but they’re still losses. Food delivery is a pretty high profile area and I’m not sure Uber is going to be able to erase these losses without the restaurants making a big public fuss. This isn’t a done deal yet, but it looks like it’s going through.
Infighting, ‘Busywork,’ Missed Warnings: How Uber Wasted $2.5 Billion on Self-Driving Cars [TheInformation]
Sum and Substance: After spending billions to develop a self-driving car, Uber is nowhere close to getting a car that can drive reliably for any length of time. Meanwhile, the unit is riven by infighting. Critics question why CEO Dara Khosrowshahi hasn’t held the team accountable….
After five years and an investment of around $2.5 billion, Uber’s effort to build a self-driving car has produced this: a car that can’t drive more than half a mile without encountering a problem. “The car doesn’t drive well” and “struggles with simple routes and simple maneuvers,” said a manager in the unit, in a 1,500-word email sent three weeks ago to Uber CEO Dara Khosrowshahi, warning of the issues. …
My Take: Looks to be a very damning indictment of a unit of Uber that once was held out to be the future of the company. There’s a paywall for this article.
Uber Is Here To Remind You That Autonomous Vehicles Aren’t Even Close [Jalopnik]
Sum and Substance: Uber, like its competitors Waymo, Zoox, Cruise and others, has been trying and failing to get autonomous cars up and running for years now. The business opportunity — no more of that having-to-employ-drivers nonsense — is obvious, but it’s funny how everyone in the self-driving business seems to have stopped talking about self-driving.
They haven’t given up, of course. But remember in 2018 when Uber said that it wanted to get you in a driverless car by the end of that year? Or when Cruise said it would test self-driving cars in New York City? Or what about when Volvo said it would have a fully autonomous car by next year?
Those timelines haven’t quite worked out, unless Volvo really is ready to go next year with a Level 5 autonomous car. I’m not holding my breath! The reasons for this delay aren’t a mystery: Creating a car able to safely deal with every real-world contingency may, in fact, be close to impossible, but everyone is still trying for now. ….
My Take: This is a derivative story from the paywalled story in “The Information”. Basically, it’s for those who don’t want to pay. To summarize, Uber has wasted $2.5 billion, and doesn’t have anything to show for their money.
The future of rideshare is a remote control rental car [VentureBeat]
Sum and Substance: In rideshare, the single largest cost per trip is the driver. It turns out the vast majority of trips have a second driver in every car: a rider with a license.
Imagine a future in which a rental car is as convenient as an Uber at half the price. More specifically, imagine an on-demand, door-to-door rental car (let’s call it an ODDcar for short).
You hail a car just as you would an Uber or a Lyft
Within minutes, an empty car pulls up to you curbside
Instead of getting into the backseat, you take the wheel
You drive yourself directly to your destination
The empty car departs
My Take: It’s an interesting idea. The author spells out pretty clearly how it would work, but somehow in today’s climate, with the pandemic, I don’t see it taking off. But who knows…
Seattle adopts minimum wage for Uber and Lyft drivers [Geekwire]
Sum and Substance: Seattle became the second big city in the nation to establish a minimum wage standard for Uber and Lyft drivers on Tuesday.
The Seattle City Council unanimously voted to adopt new regulations designed to ensure Uber and Lyft drivers earn the city’s $16.39 per hour minimum wage.
The new law requires transportation network companies to pay drivers at least $0.56 per minute when there is a passenger in the vehicle as well as a per-mile rate to cover expenses. The city says that standard will ensure drivers earn at least Seattle’s minimum wage, assuming they spend about 50% of their time waiting for rides or driving to pick up passengers. The minimum compensation standard takes effect on Jan. 1….
My Take: Seattle has taken the lead in helping drivers, and this is one more major step. Yes, it will decrease the number of drivers, but it will make sure they’re paid what they deserve.
Read more about our coverage on Seattle setting a minimum wage for drivers, and share your thoughts, here.
Readers, what do you think of this week’s roundup?
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-John @ RSG